Source Proportion Rate Bonds 45% 11% Preferred stock 10% 9% Common stock 25% 15% Retained earnings 20% 13% 100%
Q: What is the total amount of unamortized premium discount after its fourth interest payment? or
A: Effective interest rate is the interest rate which is actually interest rate which is applied on the…
Q: 2. Data About Variables Cost Driver Unit Variable Cost Level of Cost Driver S 10 1,000 30 Units sold…
A: ABC method of costing is the one which involves allocation of costs as per the worth and eliminate…
Q: The following transactions relate to Mommy's Delivery Service, a business owned and operated by…
A: Accounting books: Accounting books are the company's financial records which are drafted during a…
Q: Question. A company forfeited 100 equity shares of Rs.10 each issued at a 20% premium for refusing…
A: The forfeiture account is prepared to record the forfeited amount from the defaulter shareholders.
Q: gnment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false our... F…
A: Financial ratios helps to present the accounting data in a summarised and condensed form. Various…
Q: On December 31, 2021, an entity has a building with cost of Rp500 million and accumulated…
A: Depreciation means the amount of expenses written off from the value of fixed assets used in…
Q: Form W-2 on an annual basis to let the employer know ing the year. nW-2 to supply employer with…
A: The statement is explained as,
Q: Do my ans. In 45 minutes otherwise I will give you downvote
A:
Q: A. A roofi
A: Assets are resources that are controlled which results from prior transactions that are expected to…
Q: Jefferson Company is considering investing $33,000 in a nev last five years and to have a salvage…
A: The expense of borrowing money is called interest expenditure. For using the lender's funds, the…
Q: prepare a trial balance on the sheet provided for the trial balance i included a photo the format…
A: Preparation of trial balance is the third phase in the accounting process. After posting the…
Q: North Company designs and manufactures machines that facilitate DNA sequencing. Depending on the…
A: Introduction Activity based costing approach is used to assign factory overheads to the product by…
Q: Describe how to categorise working capital into "components" and "period" categories explain
A: The distinction between fixed and variable working capital is critical, especially when obtaining…
Q: Which of the following items are included in the computation of a sole proprietorship's taxable…
A: Taxable income of a Sole proprietor is calculated after taking into account all income earned,…
Q: Explain the role of a sales forecast in budgeting. What is the difference between a sales fore-cast…
A: Budgeting is a method of determining how you will spend all your money. This spending plan is known…
Q: Discuss the importance of employee timekeeping in preparing the payroll? Discuss the different…
A: Timekeeping Timekeeping is important for the business entity which provides and track the details of…
Q: BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $137,700 paid to its…
A: Journal entry is the primary reporting of the business transactions in the books of the entity.
Q: Compute the following for Stanley Limited. Round your answers to two decimal places. All answers…
A: The question is related to the Ratio Analysis. Ratio is the indicated quotient of two mathematical…
Q: Doogan Corporation makes a product with the following standard costs: Standard Quantity or…
A: Lets understand the basics. Variable overhead rate variance is a variance between the rate at which…
Q: Exercise F The luggage department of Sampson Company has revenues of $1,000,000; variable expenses…
A: Interest expense in accounting pertains to the cost of borrowing of a certain amount of money from a…
Q: Given the following, calculatge the state (assume 5.3%) and federal unemployment taxes that the…
A: Payroll accounting is the calculation of employee's compensation. It includes recording and…
Q: 5. Which of the pairings below related to measurement focus and basis of accounting IS correct for…
A: Nonprofit entities are those entities which are established not for the purpose of profit but for…
Q: Define the following and their differences : Real accounts capital account Nominal…
A: In accounting, there are several type of accounts being used in business. These are personal…
Q: Buffalo Incorporated began operations on January 2, 2016. Buffalo employs 12 individuals who work…
A:
Q: Enter the following transactions of an antiques shop in the accounts and extract a trial balance As…
A: Ledger accounts are the one in which journal entries are posted in chronological order to determine…
Q: "Tommy’s Music orders some music books which list for $9.95. What is their cost, after a 20/10 trade…
A: List Price = 9.95 Trade Discount = 20/10 Cost = 9.95 - 9.95*0.20 - (9.95 - 9.95*0.20)*0.10 = 9.95…
Q: Independently considering each of the following statements regarding Form W-2 (Wage and Tax…
A: The employer makes deductions from the employee’s salary and therefore there is some legal…
Q: 5. On December 31, 2019, an entity declared a cash dividend payable March 31, 2020. On…
A:
Q: 9
A: Variable cost varies with a number of units whereas fixed cost remains constant within a relevant…
Q: The earliest date that condemned property can be replaced and still qualify for involuntary…
A: Condemnation is legal acquisition of property by municipal authorities or government entities for…
Q: True or false 9. The control risk is the risk of auditors fail to detect material misstatement leads…
A: Risk of material misstatement is defined as 'the risk that the financial statements are materially…
Q: The Green Valley Restaurant has three operating departments: Café, Bar, and Catering. The new…
A: The question is related to Cost Volume Profit Analysis. The Weighted Average Contribution Margin…
Q: Wilson Cafeteria issues gift cards, which are very popular in the small town where the restaurant is…
A: Journal entry shows the record of all the transactions occurring in the business using the double…
Q: Rockhill Corporation operates a women's dlothing boutique. Its taxable income for the current year…
A: Income tax is a tax levied on the income of an individual or a corporation. Income tax is the…
Q: Part D E QUESTION 3. Sparkly Shoes Ltd are considering a new shop in Brighton from 1 July…
A:
Q: Multiple In 2019, Mr. Pacino was employed as account officer in a non-life insurance company.…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: On September 1, 2022, when the prevailing market rate on similar instruments was at 5%, ABC…
A: DEF Corporation acquired P 50,00,000 bonds of Y company in 1st September 2022. The bonds will be…
Q: A qualified distribution from a Roth IRA must meet which of the following requirements? I. The…
A:
Q: Management accounting and financial accounting differ in that management accounting information is…
A: Management accounting and financial accounting are very much similar and differ mainly in two…
Q: i. Interest on drawings in respect of the current financial year, the interest amounted to K500o for…
A: Income statement The purpose of preparing the income statement is to know the net income which are…
Q: Revenue per Unit $10.00 Commission (variable cost) $1.00 Fill in highlighted cells while including…
A: It is the point at which the company will be in a no-profit or no-loss situation. In other words,…
Q: Sand Inc., a company that produces and sells a single product, has provided its contribution format…
A: Introduction: Contribution margin: Deduction of variable costs from sales value derives the…
Q: Use the following facts to calculate Return on Assets: Ending Total Assets = $825,000; Beginning…
A: Return on assets is one of the profitability ratio, which shows how much net income is earned on…
Q: 1. Under Unit of Production Method of Calculating Depreciation, if there is no production in any…
A: Unit of Production Method This method of charging depreciation on the asset is based on the units…
Q: e amount of tax due to the IRS
A: A federal income tax is the total tax on annual earnings. Individuals, businesses, and other similar…
Q: Housing prices in a particular county have increased by 25% over the prce of houses five yoars ago…
A: Introduction: When purchasing products or services, average price is an important metric, and…
Q: Which of the following statements regarding The New York Home Business Endorsement (HO 07 01) is…
A: Home Business Insurance Coverage (HO 07 01) The unendorsed homeowners form excludes or limits most…
Q: A fumiture salesperson can sell 60 pieces of furniture over an entire year. To hold onto the…
A: the minimum inventory cost at the cost that is to be incurred irrespective of the level of inventory…
Q: curred in the purchase, resul % every June 30 and Decembe t year-end are presented belov 99
A: Transaction costs or the bond issue costs are the expenses that are incurred by the company for…
Q: Problem 3: A certain machine costs P 40,000, has a life of 4 years and salvage value of P 5,000. The…
A: Formula: Depreciation per unit = ( Asset cost - Salvage value ) / Total estimated Units. Deduction…
Weighted Average Cost of Capital
Austin, Inc. plans to finance its expansion by raising the needed investment capital from the following sources in the indicated proportions and respective capital cost rates.
| Capital Cost | ||
|---|---|---|
| Source | Proportion | Rate |
| Bonds | 45% | 11% |
| 10% | 9% | |
| Common stock | 25% | 15% |
| 20% | 13% | |
| 100% |
Calculate the weighted average cost of capital.
Round answers to one decimal place. For example, 0.457 = 45.7%.
| Weighted Average | |
|---|---|
| Cost of Capital | |
| Bonds | Answer |
| Preferred stock | Answer |
| Common stock | Answer |
| Retained earnings | Answer |
| Answer |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Weighted Average Cost of CapitalGardner, Inc., plans to finance its expansion by raising the needed investment capital from the following sources in the indicated proportions and respective capital cost rates: Capital Cost Source Proportion Rate Bonds 40% 12% Preferred stock 20% 8% Common stock 30% 11% Retained earnings 10% 8% 100% Calculate the weighted average cost of capital.Round answers to one decimal place. For example, 0.457 = 45.7%. Weighted Average Cost of Capital Bonds Answer Preferred stock Answer Common stock Answer Retained earnings Answer AnswerGiven the information below. Find the Weighted Average Cost of Capital Market Value of Equity = $22,000,000; Debt = $15,000,000; Cash or Cash Equivalents = $15,000,000 iD = 0.10 or 10% iMKT = 0.17 or 17% tCorp = 0.30 or 30% bK = 1.5 IRF = 0.02 = 2%Use the information provided below to answer the following questions: 4.1 Calculate the weighted average cost of capital (calculations expressed to two decimal places, where applicable). (16 marks) 4.2 Calculate the cost of equity using the Gordon Growth Model (expressed to two decimal places). (4 marks) INFORMATION Capri Limited intends raising finance for a proposed new project. The financial manager has provided the following information to determine the present cost of capital to the company: The capital structure consists of the following: ■ 2 million ordinary shares issued at R2 each but currently trading at R3 each. The company’s beta coefficient is 1.4. The risk-free rate is 9%. The return on the market is 17%. ■ 1 million 12%, R2 preference shares with a market value of R3 per share. ■ R1 000 000 20% Bank loan, due in January 2026. Additional information ■ The Capital Asset Pricing Model is used to determine the cost of equity. ■ A dividend growth of 10% per annum on ordinary…
- Weighted Average Cost of CapitalRust, Inc. plans to finance its expansion by raising the needed investment capital from the following sources in the indicated proportions and respective capital cost rates. Capital Cost Source Proportion Rate Bonds 45% 11% Preferred stock 10% 9% Common stock 25% 15% Retained earnings 20% 13% 100% Calculate the weighted average cost of capital.Round answers to one decimal place. For example, 0.457 = 45.7%. Weighted Average Cost of Capital Bonds Answer Preferred stock Answer Common stock Answer Retained earnings Answer AnswerEvans Technology has the following capital structure. Debt Common equity The aftertax cost of debt is 8.50 percent, and the cost of common equity (in the form of retained earnings) is 15.50 percent. a. What is the firm's weighted average cost of capital? Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places. 48% 60 Debt Common equity Weighted average cost of capital Weighted Cost % % An outside consultant has suggested that because debt is cheaper than equity, the firm should switch to a capital structure that is 50 percent debt and 50 percent equity. Under this new and more debt-oriented arrangement, the aftertax cost of debt is 9.50 percent, and the cost of common equity (in the form of retained earnings) is 17.50 percent. b. Recalculate the firm's weighted average cost of canitalURGENT PLEASE d. Calculate the firm's weighted average cost of capital using the capital structure weights shown in the following table . (Round answer to the nearest 0.01%)
- The calculation of a weighted average cost of capital (WACC) involves calculating the weighted average of the required rates of return on debt and equity, where the weights equal the percentage of each type of financing in the firm’s overall capital structure. what is the symbol that represents the cost of raising capital through retained earnings in the weighted average cost of capital (WACC) equation._________ Paolo Co. has $2.56 million of debt, $2.68 million of preferred stock, and $2.02 million of common equity. The appropriate weight of the firm's debt in the calculation of the company's weighted average cost of capital is_________%.Weighted Average Cost of Capital Gardner, Inc., plans to finance its expansion by raising the needed investment capital from the following sources in the indicated proportions and respective capital cost rates: Capital Cost Source Bonds Preferred stock Common stock Retained earnings Proportion Rate 30% 13% 10% 9% 50% 12% 10% 9% 100% Calculate the weighted average cost of capital. Round answers to one decimal place. For example, 0.4567= 45.7%. Bonds Preferred stock Common stock Retained earnings Weighted Average Cost of Capital % % % % %The market values and after-tax costs of various sources of capital used by Ridge Tool are shown in the following table. Source of capital Market value Individual cost Long-term debt $700,000 5.3% Preferred stock 50,000 12.0 Common stock equity 650,000 16.0 a. Calculate the firm’s WACC. b. Explain how the firm can use this cost in the investment decision-making process. Please show your work.
- The basic WACC equation The calculation of a weighted average cost of capital (WACC) involves calculating the weighted average of the required rates of return on debt and equity, where the weights equal the percentage of each type of financing in the firm’s overall capital structure. What is the symbol that represents the cost of raising capital by issuing new stock in the weighted average cost of capital (WACC) equation. $Kevin Co. has 1.39 million of debt, $1 million of preferred stock, and $2.87 million of common equity. The appropriate weight of the firm's common equity debt in the calculation of the company's weighted average cost of capital is________________%Seduak has estimated the costs of debt and equity capital for various proportions of debt in its capital structure. % Debt After-tax cost of debt Cost of equity 0% - 13.0% 10 5.4% 13.3 20 5.4 13.8 30 5.8 14.4 40 6.3 15.2 50 7.0 16.0 60 8.2 17.0 Based on these estimates, determine Seduak’s optimal capital structureAssume that your company is trying to determine its optimal capital structure, which consists only of debt and common stock. To estimate the cost of debt, the company has produced the following table: 09.86% 9.56% Percent Financed With Debt 10.16% 8.96% 9.26% 0.10 0.20 0.30 0.40 0.50 Percent Financed With Equity 0.90 0.80 0.70 0.60 0.50 Debt/Equity Ratio Now assume that the company's tax rate is 40 percent, that the company uses the CAPM to estimate its cost of common equity, Ks, that the risk-free rate is 5 percent and the market risk premium is 6 percent. Finally assume that if it has no debt its WACC would be equal to its cost of equity which would be equal to 11 percent (you should now be able to determine its "unlevered beta," bu). 0.10/0.90 0.11 0.20/0.80 0.25 Given this information, determine the firm's cost of capital if it finances with 40 percent debt and 60 percent equity. 0.30/0.70=0.43 0.40/0.600.67 0.50/0.50 = 1.00 Bond Rating AA A A BB B Before-Tax Cost of Debt 7.0% 7.2%…